India to triple its electronic production by 2025-26, says RBI

India's electronic production has surged to 3 % of GDP in 2023-24, highlighted in the July 2024, monthly bulletin of the Reserve Bank of India (RBI). The bulletin also highlighted that the value of electronics produced has surged from $37 bn in 2015-16 to $115 bn in 2023-24.

"India's efforts to transform into a manufacturing powerhouse are already bearing fruit in electronics manufacturing. The value of electronics produced rose from $37 bn to $ 115 bn (3% of GDP) between 2015-16 and 2023-24" said the report.

The RBI also added that the near term objective of India is to triple electronic production by 2025-26. Currently, India's production of electronics accounts for 3% of the global total, with this share growing faster than any other country.

In 2023-24, India exported $15.6 billion of mobile phones. It exported $1.5 billion worth of phones in April 2024. Apple sources about one in seven of its iPhones from India, double of what it did a year ago. Samsung, its South Korean rival, has its largest phone-making facility in India.

Niti Aayog also in its report released on Thursday July 18th, highlighted that global electronics market is very large and estimated at $4.3 trillion; China is the dominant player with around 60% share, Vietnam grew fastest in the past decade, but India's electronic production is also surging rapidly. Currently, India's electronics market is primarily driven by mobile phones, which now make up to 43% of total electronics production. The global electronics market, worth $4.3 trillion, is led by countries such as China, Taiwan, the USA, South Korea, Vietnam, and Malaysia.

The RBI in its report also noted that the expanding manufacturing footprint is key to boosting the share of India's exports from the current level of 2.4% of world exports to at least 5%, goods and services taken together.

It added that on the back of exports of close to $780 billion in 2023-24 and a cumulative rate of expansion of 10.2% in the first quarter, India is better prepared in 2024-25 to achieve exports of over $ 800 billion.

In the recent times, India has vastly reduced its dependence on smartphone imports, now manufacturing 99% domestically. Government initiatives like Make in India and Digital India, along with improved infrastructure and business ease, backed by various incentives, have spurred domestic manufacturing and attracted foreign investment.

Despite these advances, India's electronics market is relatively small, representing just 3.3% of the global market. The focus has mainly been on assembly, with limited capabilities in design and component manufacturing.

India needs to localize high-tech components, bolster design capabilities through R&D investments, and form strategic partnerships with global tech leaders. Niti Aayog also recommended the industry to promote skill, industrial infra, innovation & research and foster conducive ecosystem for sustainable growth of the electronic manufacturing in India.